The area around 38th and Meridian streets should be prime for development, Matt Tully argues, but instead remains a trouble spot. / Star file

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If you want to find a glaring example of untapped potential, take a look around the area of 38th and Meridian streets. What should be a bustling urban corridor, one filled with shops and cafes and a diverse mix of new and old residents, is at some turns a wasteland and at others a depressing hub for crime.

The potential is clear: Old businesses in a strip along Illinois Street hang tough, from the Melody Inn to an Ace Hardware, and the 11 acres of Tarkington Park sit quietly many days, begging to become the type of bold urban park that has rejuvenated neighborhoods in other cities. Thousands of commuters pass by every day, and empty lots could house apartments and commercial sites that the area desperately needs.

But years, even decades, of dreaming have left the area another talking point for critics of the city and for those who say decayed neighborhoods are lost causes. It’s been nearly a decade since the city pumped millions into infrastructure and clean-up efforts along 38th Street, but development hasn’t followed. Several years ago Starbucks opened a much-welcomed store at 38th and Meridian, before crime drove both customers and the coffee giant away.

And now, those fighting hardest for the area find themselves stuck. They need city investment — in abandoned properties, environmental cleanup, smarter street design and the park — to convince developers to back the type of projects that strengthen neighborhoods. They need the city to provide facade grants for the old businesses that have stayed loyal. They need private investment. They need developers who buy into a sweeping vision for the neighborhood.

But crime and past failures have kept wallets closed and left so many skittish.

“There is retail demand in the neighborhoods here,” Michael McKillip, executive director of Midtown Indianapolis, said as we walked along 38th Street on Tuesday morning. “There is housing demand. There is potential to turn this area into something unique and special. But if nobody goes first, if nobody is willing to invest their money first, it just won’t happen.”

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The area’s neighborhood groups and community development corporations have worked for years on plans to address holistically the area’s problems and potential. They see restaurants, new housing and a walkable city node. Tarkington Park is key. Filling it with a cafe, a top-notch play area for small kids and better uses of the space could encourage more housing and a community feel. Turning the empty storefront on the northwest corner of 38th and Illinois into a transit hub could bring more pedestrian life. The key to success is getting people out of their cars along 38th Street for more than a fill-up, McKillip said.

To do that, of course, you have to convince them it’s safe.

And that brings us to a controversy that has erupted over plans to open yet another gas station in the area. There are already two on the south side of 38th Street and now the owner of one wants to add a third on the northeast corner of 38th and Capital. Every neighborhood association in the area has voted to oppose the plan, which needs a variance to include the type of convenience store proposed.

Why the fight? Because the two nearby gas stations have been magnets for crime. Last year, police took more than 800 runs to the two gas stations, with scores of people arrested, a carjacking and more than a dozen reports of assaults. Police have reported gang activity, drugs and prostitution in the areas in and around the gas stations.

“More profit for them is more long-term deterioration for the neighborhood,” McKillip said.

But can an area so desperately in need of development say no to one? Definitely, said City-County Councilman John Barth, who argues, “there is positive investment and investment that worsens a neighborhood and stands in the way of moving forward with its vision.”

A representative for the proposed gas station promised investments in the lot and said it would be a “significant improvement” over the auto shop now there and “more attractive.” But he acknowledged the owner has done little to improve the Shell station he owns across the street, or the site of the proposed new gas station, which he also owns.

Tuesday morning, a constant flow of cars and trucks zoomed along 38th Street. They passed a row of intersections just minutes from Downtown, intersections not far from historic Crown Hill Cemetery and the Indianapolis Museum of Art. It’s a part of the city that should be a showpiece but instead remains a headache.

“We have to make the right decisions and the right investments,” McKillip said. “If not, we’ll be here 20 years from now and nothing will have changed.”